Income Shocks and HIV in Africa

We examine how variation in local economic conditions has shaped the AIDS epidemic in Africa. Using data from over 200,000 individuals across 19 countries, we match biomarker data on individuals' serostatus to information on local rainfall shocks, a large source of income variation for rural households. We estimate infection rates in HIV-endemic rural areas increase by 11% for every recent drought, an effect that is statistically and economically significant. Income shocks explain up to 20% of variation in HIV prevalence across African countries, suggesting existing approaches to HIV prevention could be bolstered by helping households manage income risk better.